Author Topic: Employer "Cafeteria Plan" Going Away - What Happens?  (Read 1774 times)


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Employer "Cafeteria Plan" Going Away - What Happens?
« on: September 27, 2014, 01:45:36 PM »
My wife's employer currently offers what I believe is classified as a "section 125 cafeteria plan" in lieu of offering health insurance.  I put that in quotes because I am not 100% certain what the account is... I originally thought it was something like an HRA or HSA, but now I'm not sure (the company actually calls it an HRA, but what do they know??).  The way it works is they contribute $x per year into an account (well, technically it is spread out across the year, but I don't think that is relevant).  My wife has no option to contribute anything to this.  As we incur expenses, we file requests for reimbursement from the account.  This can cover everything from health insurance premiums (if they are paid with after-tax dollars), prescriptions, and even some OTC items.  Also, the money rolls over from year to year.

My employer provides more of a traditional health insurance option, and I purchase that for our family.  The amount that my wife's employer provides is enough to cover all of our out-of-pocket expenses (and unfortunately, my employer doesn't allow me to pay insurance premiums post-tax, so I cannot use the money in that manner).  Most years, we've rolled over a decent sum of money and we now have several thousand in the account.

To my question -- with the employer mandate portion of the ACA kicking in soon, her employer is considering their options for going forward.  One scenario that they have floated involves discontinuing the "HRA" (or whatever this account is).  They have been very opaque about what this would mean to the money that is already sitting there.  I figure there has to be some legal guidelines that would dictate what they could do with this, but I haven't found anything yet.  Does anyone have any experience with this, or know what questions we should be asking her HR (or the account administrator, which is a 3rd party)?